Underpricing, a problem in the industry

Last week I wrote about my Christmas wish list. This week, in keeping with the theme, I thought I’d get in early and start to consider my New Years Resolutions. My first resolution will be to try to stop losing my cool when I read claims that real estate agents regularly and intentionally over estimate the selling price of property. Last week a review into vendor disclosure was presented to NSW Labor Party with the principal recommendation being that a pest and building report be a mandated inclusion in auction sale contracts for residential property.

I’ve read the report and the main point I take exception to is the claim by the author of the report, Matt Brown MP as reported in the media that if adopted the reforms would ‘save people from being out of pocket when they had been induced by an unrealistically low advertised price into chasing a property they couldn’t actually afford to buy.’

Okay so sometimes a property does sell for more than the estimated selling price but that doesn’t automatically mean the agent has misrepresented the value. Morton & Morton has a comprehensive checklist that must be completed to help guide our agents when determining an appropriate selling price.  The checklist conforms with all legislative and licensing requirements including those outlined by the NSW Office of Fair Trading.

A reputable, experienced real estate agent carries out extensive research and property inspections to determine an estimated selling price together with analysis of potential demand and buyer interest. 

But the reality is we aren’t fortune tellers.